Ä¢¹½AV

The BNPL provider expanded its merchant network and pushed in-store. A potential Apple Pay deal could help raise its profile

We look at the trends that will sustain that growth into 2024

Amazon’s BNPL partners—Affirm and Citi—likely benefited from growing consumer demand for the tool

The company has been beefing up its BNPL capabilities ever since its exclusivity period with Affirm ended earlier this year

Despite delays, Apple can benefit from its extensive user base and merchant acceptance to build BNPL success.

While these consumers are getting access to needed credit, providers must consider the risks of overextension

The service may incentivize more shoppers to pay with the BNPL provider, and it may also bring Klarna key data benefits

The subscription service model is growing in popularity across the payments industry as it provides payment transparency for consumers and a steady stream of revenues for providers

It wants to lean on AI to attract users, while new environmental-focused features should strengthen its brand with younger shoppers.

Apple’s credit card, BNPL product, and savings account put it in direct competition with financial services incumbents. With 130.1 million US iOS users loyal to its unsurpassed UX and dominant digital platform, the threat will only grow.

More than one-third of US consumers plan to spend more this holiday season than last year, according to a Block and Afterpay survey. US holiday sales are projected to reach $1.316 trillion in 2023, per our forecasts. And two-thirds of consumers plan to use BNPL to ease the stress of holiday shopping, per an Afterpay survey, creating a huge volume opportunity for BNPL fintechs like Affirm.

But Splitit is not alone in targeting the in-store BNPL market: Klarna and Afterpay also have offerings. That could make it harder for the firm to stand out as industry leaders also turn from ecommerce to brick-and-mortar shopping. This article originally appeared in Insider Intelligence's Payments Innovation Briefing—a daily recap of top stories reshaping the payments industry.

Fintechs like Klarna and Afterpay and incumbents entering the market have made it harder for BNPL providers to stand out. But Affirm is still increasing its volume and can benefit from market growth: By 2026, 38.9% of US internet users will use a BNPL solution, up from 30.7% in 2022, per Insider Intelligence forecasts. What next?

American Express, Chase, and Citi landed the top three rankings for installment plan satisfaction; Sezzle, Afterpay, and Affirm earned the lowest scores. This is all despite the fact that most issuers charge a flat fee to convert transactions into installments, whereas most BNPL fintechs offer plans without any fees or interest.

Affirm and Afterpay both shut down their rewards this year. And Affirm now boasts that interest-bearing loans—previously anathema to the BNPL conceit—make up 73% of its product composition. Affirm also hiked its maximum interest rate to 36% last year, well above the 24.7% national average for credit cards. Anti-BNPL pearl-clutching hasn’t helped.

Key stat: 31% of consumers who have already started holiday shopping have used BNPL providers such as Affirm, Afterpay, and Splitit, according to CivicScience. What it means: Flexible payment options may encourage more early holiday shoppers, especially if they are budget-conscious. 3. Brands will continue to be reliant on Amazon to boost discoverability and sales.

Examples include Affirm, Afterpay, Klarna, Zip, and PayPal’s BNPL service. Some short-term, no-interest loans can be accessed only at retailers. Examples include Bread Pay and SetPay. Services that provide a revolving line of credit, retailer-branded financing options, closed-loop marketplace financing services, and card-linked installment services are excluded.